There is a lot of hullabaloo over the recent news that the American International Group (AIG) paid its employees $165 million in bonuses after receiving more than $173 billion in federal bailout money.
Iowa Senator Chuck Grassley has called on the AIG employees who were paid bonuses to resign and apologize to the American public. Iowa Congressman Bruce Braley wants a 100 percent tax rate on bonuses being paid to employees of companies who have received or will receive federal bailout dollars.
The news media and our elected officials are really good at getting the American people worked up into a tizzy over the bonuses paid by AIG and other companies and industries that have been bailed out, but it is our elected officials who we should be upset with, not companies like AIG.
It was our elected officials who told us that AIG was “too big to fail,” and by now you know that “too big to fail” is just code for saying we don’t want to take a company through bankruptcy. Had AIG gone through some form of bankruptcy restructuring, officials could have renegotiated the contracts that awarded these outlandish bonuses and prevented them from occurring. Due to Congress’ action, that didn’t happen.
Our elected officials threw an unimaginable amount of money at AIG. AIG then gave some of those federal dollars to troubled financial institutions like Merrill Lynch-Bank of America, Morgan Stanley, and Goldman Sachs Group, who also got funds directly from the federal government.
Congress forced these bailout bills through with little or no debate. The American public was led to believe that, if we didn’t act quickly, the entire financial sector would collapse. This all began back in September when the Dow was around 10,000. Today it’s around 7,300.
Members of Congress should have taken the time to look at all of the commitments AIG had made to its employees before they gave AIG billions of dollars. If they would have done their homework last September and eliminated the possibility of future bonuses, we wouldn’t have to deal with our elected officials yelling at the top of their lungs and stomping their feet when a company like AIG pays huge bonuses. Congress let this happen, not AIG.
It’s also ridiculous that Senator Grassley had to apologize for the remarks he made in regards to the AIG bonuses. Grassley probably could have said it better than he did, but the main thing to take from his comments is the level of his frustration. The impact of Grassley’s frustration was lost due the words he used.
Why was there more pressure on Senator Grassley to apologize for his remarks yesterday than there was anger at Senator Chris Dodd, who actually helped get us into this mess? More importantly, where is the outcry over the simple fact that Congress has failed us by letting this happen in the first place?
Members of Congress should be the ones apologizing to the American people and offering to resign due to their ignorance and incompetence.
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